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See Mongolia related quotes at bottom of newsletter
SGQ closed -7.55% in HK, but closed +1.29% higher to C$6.28 in Toronto on Tuesday
SouthGobi (01878) tips higher coal selling prices in 4Q
October 4 (ETNet) SouthGobi Resources (01878) said it expects its sales volume and average selling prices will be at or above the mid-point of the range of 1.2 million tonnes to 1.6 million tonnes and US$50 per tonne to US$55 per tonne in the third quarter.
The company also re-iterates that direct cash costs are returning to recent trend levels through the second half of 2011.
With respect to the coking coal market, SouthGobi is not currently observing weakness among its customers and the regions of China in which its coal is generally consumed.
SouthGobi's current expectation is that fourth quarter sales volume will be similar to third quarter volume at moderately higher selling prices than the third quarter. Most coal for fourth quarter is already now contracted. (HL)
XAM closed -2.53% to A$0.385
Appointment of Non-Executive Director
October 4, Xanadu Mines Limited (ASX:XAM) --
The Board of Xanadu Mines Ltd (“Xanadu” or “the Company”) is pleased to advise that Ms Hannah Badenach has been appointed as a Non-Executive Director of the Company, effective 4 October 2011.
Ms Badenach is Vice President of Asset Development & Operations at Noble Resources Limited and a lawyer, having practiced law for several years in Asia, including two years in Mongolia, starting in 2004 with Lynch & Mahoney, one of Mongolia’s leading law firms. Ms Badenach was Managing Director of QGX Mongol LLC from 2006, and was responsible for the general management of the company in Mongolia until the company was sold in 2008.
Ms Badenach has extensive experience in management and development in Mongolia and the board believes she brings diversity and skills which will add significant value to the Company. Hannah has a Bachelor of Laws (Hons) and a Bachelor of Arts from the University of Tasmania.
1733 closed -8.48% to HK$1.51
Winsway: SHARE REPURCHASE PURSUANT TO SHARE REPURCHASE PLAN
October 4, Winsway Coking Coal Holdings Limited (HK:1733) --
Pursuant to the Share Repurchase Plan, the Company repurchased 1,559,000 of its own shares on 4 October 2011, at the highest and lowest price of HK$1.50 and HK$1.50, respectively (the “Share Repurchase”). The aggregate consideration for the Share Repurchase is HK$2,338,500 and was funded from the Company’s existing available cash reserves and free cash flow other than proceeds from the initial public offering of the Company in 2010 and issuance of the senior notes in April 2011. The shares repurchased by the Company represent approximately 0.041% of the existing total issued share capital of the Company. Up to the date of this announcement, the Company has repurchased a total of 17,823,000 of its own shares pursuant to the Share Repurchase Plan.
IVN closed +7.6% in NY but hit new 52 week low in early trading
Ivanhoe Mines Stock Hits New 52-Week Low (IVN)
NEW YORK, October 4 (TheStreet) -- Ivanhoe Mines (NYSE:IVN) hit a new 52-week low Tuesday as it is currently trading at $12.51, below its previous 52-week low of $12.55 with 341,978 shares traded as of 9:40 a.m. ET. Average volume has been 2.4 million shares over the past 30 days.
…
Tense times as Mongolia pushes for larger stake in Oyu Tolgoi
MONGOLIA'S push to speed a move to half ownership of its breakthrough copper project, Oyu Tolgoi, is a dangerous moment for the substantially Rio Tinto-funded $US4 billion ($4.2bn) mine and a new democracy's emergence as a viable destination for mainstream mining.
October 5 (The Australian) Just days after Rio chairman Jan du Plessis led a corporate mission to the yurts of southern Mongolia to join Oyu Tolgoi's Half Way There celebration, the Mongolian cabinet translated rumour into fact with the delivery of a request to review the timelines established in the 2009 investment agreement.
That foundation deal, to some degree a product of the same sort of government brinkmanship, gave the then operator of Oyu Tolgoi, Canadian-listed Ivanhoe Mines, a comprehensive, secure framework for development in return for surrendering 34 per cent of the project to Mongolia.
Mongolia cast away a 68 per cent windfall profits tax on copper and gold that had been designed to capture Oyu Tolgoi's wealth, and in return got a free-carry on the 34 per cent stake and a call, at fair-market valuation, on another 16 per cent of the project, which could be triggered one year after the initial 30-year term of the investment agreement.
It now seems some in the Mongolian cabinet no longer want to wait until 2040.
Mongolia's call for a new round of talks on Oyu Tolgoi's investment framework inspired a rare moment of concord between the sparring partners in the development, Ivanhoe and Rio.
The two have politely rejected the invitation to renegotiate and have written jointly to the three members of Mongolia's peak political authority, the National Security Council, seeking "full and immediate support for the investment agreement".
The first thing to note about the 2009 deal is that it had, very obviously, the full support of Rio Tinto, which was then just a 10 per cent shareholder in Ivanhoe but which had already established a pathway to 19.9 per cent ownership and an intention to go a whole lot further.
Rio people were in the middle of the negotiations and chief executive Tom Albanese has since consistently asserted the quality of the investment security established by the deal.
As well, embedding Mongolia as a major shareholder in Oyu Tolgoi made pretty inevitable Rio Tinto's now clear intention to take control of Ivanhoe.
Both Rio and Ivanhoe promote Oyu Tolgoi as a 100-year project. So it will have another 70 years, and probably more, left in it when Mongolia becomes a half owner.
It is hard to imagine Rio will be content with anything less than full ownership of the other half of the long-term economic benefit that will flow from Oyu Tolgoi. And the only way to do that now is to own the original investment conduit, Ivanhoe.
On top of that, the arrangements struck in October 2009 generated furrowed brows and a whole lot more through a diverse sweep of Rio's major competitors on mining's emerging frontiers.
The collective concern was that Rio, still emerging from its Alcan-created debt crisis, had surrendered too much value in its race to create operational momentum, and in doing so had risked creating insatiable ambitions across mining's other frontiers.
The first hint of this latest trouble at the Mongolian mill came early in September when a group of 20 MPs petitioned the government to initiate changes to the investment agreement ahead of next June's general election.
Rio, pretty fairly, dismissed that as election noise. But things took a turn for the serious on the weekend ahead of the Half Way There ceremony, with Mongolia's mineral resources and energy minister saying Ivanhoe and Rio would be asked to open discussions on bringing forward the trigger for the move to 50 per cent. The idea was that once the investors had recouped their capital investment, the government could make its move.
The letters of invitation foreshadowed by the minister were duly delivered late last week, according to Ivanhoe. And the subjects of discussion were not limited to ownership. The government also wants to slap a "sliding-scale royalty" on the project.
Rio and Ivanhoe have told the government they do not want to engage and, further, they do not need to. The question now is whether the Mongolian government wants to push this matter or whether it really is just political theatre.
The miners' view is that that they have a "rock-solid agreement, fair and square". That confidence is built on the certainty that underpinned the original agreement.
According to the announcement of the 2009 deal: "All investments by Ivanhoe will enjoy legal protection guaranteed by the Mongolian constitution, foreign investment law and other international treaties to which Mongolia is a party."
The same document notes that Mongolia's minerals law provides that projects of Oyu Tolgoi's scale qualify for 30 years of stable tax rates and regulatory provisions, with an option of extending such protection for an additional 20 years. As a result, the investment partners asserted in 2009 that their corporate tax, customer's duty, value-added-tax, excise tax and royalties were set for the life of their investment agreement.
The other point here is that the agreement installs the United Nations Commission on International Trade Law as the ultimate arbitrator for disputes over Oyu Tolgoi's progress.
On the face of it then, if the worst case does play out here, the miners seem to have clear recourse to an open, external court of appeal.
But the fact remains that the laws Mongolia makes are the laws that Mongolia can just as easily unmake. And this reality is identified plainly in the Ivanhoe-Rio dialogue with the National Security Council, whose members are the president, prime minister and speaker of the house.
High-ranking Development Bank official dismissed
October 4 (news.mn) The Government has dismissed the head of the Development Bank’s representative managing council. Ch.Khashchuluun, who was appointed to the position on May 15, was dismissed last week. An official from the Finance Ministry has been appointed as an interim replacement.
One point of contention during Ch.Khashchuluun’s tenure was a proposed bond issue. At one point he said it would not be possible for domestic investors to purchase DB bonds. DB officials met with eleven banks and three law firms to prepare for a bond issue. Four banks and one law firm have agreed to issue the bonds on the Asian market.
The Government has the right to appoint managing officials of DB’s representative managing council, and the Finance Ministry has some say over DB’s bond issues.
Critics point out that the DB has not even started a USD 5 billion railway project, even though the Government has guaranteed financing. That is why the Minister for Roads, Transportation and Urban Development, Kh.Battulga, spoke out against the DB at last week’s Government meeting.
MP R.Amarjargal sent questions about the DB bond issue to Prime Minister S.Batbold last Thursday.
Some say the DB has not been able to work without political interference.
MPP offers two options for draft election law
October 4 (news.mn) The head of the DP caucus in Parliament, Ch.Saikhanbileg, told our correspondent that a draft law on the election should be the top priority of the autumn session.
Saikhanbileg said the MPP working group on Friday came up with two possible versions of a draft election law. In one, 52 MPs would be chosen under the “majority” system and 24 under the “proportional” system. In the other the ratio is 50 to 26.
The DP working group has suggested a ratio of 38 to 38. The DP working group says it will discuss the MPP working group’s proposals.
Ch.Saikhanbileg added that the MPP working group would, in his opinion, suggest another version of the draft law.
ABOUT EXPORT OF COPPER CONCENTRATE
October 4. Ulaanbaatar, Mongolia, /MONTSAME/ In the first eight month of this year, Mongolia exported 377.3 thousand tons of copper concentrate.
It was a decrease by 3.8 thousand tons against the previous year.
Despite this, price value of the export went up thanks to a boost in the border price that reached USD 1,753 from USD 1,312. The export of the copper concentrate reached USD 500 million in price value in the eight months of the last year, in this year's eight months it was USD 661.5 million.
IMPORTS INCREASING REACHING 1.1 BILLION US DOLLARS
October 4, Ulaanbaatar, Mongolia, /MONTSAME/ Mongolia imported 1.1 billion US dollars worth automobiles, equipment, electric appliances and spare parts in the first eight months of 2011. Against the same period of 2010, the import has increased by 172.5 percent. Machines, automobiles, mechanic equipment and spare parts account for 67.3 percent, its 57.1 percent are lifting, loading, unloading vehicles and heavy-duty trucks mechanisms.
Imports of electric machines, equipment, parts have reached 360.6 million US dollars, increasing 248.9 million US dollars and accounting for 32.6 percent. Of them, 68.7 percent are electric resources parts, transformers, telephones, electronic communication apparatus, Tv sets, video equipment, insulator wires, cables, energy distribution power and control panels.
Table: Mongolia Related Stocks (Source: Bloomberg)
Name | Symbol | $ | Price | Change | +-% | Open | High | Low | Volume | Time | % YTD | % 12 m | |
Indices | ASX 200 | 3,872.10 | -24.8999 | -0.64% | 3,891.60 | 3,904.10 | 3,840.20 | - | 4-Oct | ||||
Nikkei 225 | 16,250.27 | -571.881 | -3.40% | 16,731.58 | 16,840.91 | 16,170.35 | - | 4-Oct | |||||
Hang Seng | 8,456.12 | -89.3604 | -1.05% | 8,426.39 | 8,470.76 | 8,359.24 | - | 4-Oct | |||||
FTSE 100 | 4,944.44 | -131.06 | -2.58% | 5,075.50 | 5,075.50 | 4,868.60 | - | 4-Oct | |||||
TSX Composite | 11,177.91 | -73.9297 | -0.66% | 11,049.74 | 11,242.14 | 10,848.19 | - | 4-Oct | |||||
S&P 500 | 1,123.95 | 24.72 | 2.25% | 1,097.42 | 1,125.12 | 1,074.77 | - | 4-Oct | |||||
ASX | Aspire Mining | A$ | 0.43 | -0.005 | -1.15% | 0.425 | 0.43 | 0.42 | 460,475 | 4-Oct | -10.42% | 168.75% | |
Blina Minerals | A$ | 0.01 | 0.001 | 11.11% | 0.01 | 0.01 | 0.01 | 1,000,000 | 4-Oct | -33.33% | -50.00% | ||
C@ | A$ | 0.052 | -0.003 | -5.45% | 0.051 | 0.053 | 0.051 | 1,315,838 | 4-Oct | 85.71% | 225.00% | ||
General Mining | A$ | 0.13 | 0 | 0.00% | 0.13 | 0.13 | 0.13 | 0 | 3-Oct | 8.33% | -23.53% | ||
Guildford Coal | A$ | 0.93 | -0.01 | -1.06% | 0.89 | 0.935 | 0.89 | 330,032 | 4-Oct | 27.40% | 132.50% | ||
Haranga Resources | A$ | 0.22 | -0.005 | -2.22% | 0.22 | 0.22 | 0.22 | 672,133 | 4-Oct | -65.63% | |||
Hunnu Coal | A$ | 1.645 | -0.035 | -2.08% | 1.66 | 1.675 | 1.645 | 1,994,114 | 4-Oct | 23.22% | 86.93% | ||
Mongolian Res Corp | A$ | 0.26 | 0 | 0.00% | 0.25 | 0.26 | 0.25 | 0 | 30-Sep | ||||
TVN Corp. | A$ | 0.045 | 0.003 | 7.14% | 0.042 | 0.045 | 0.041 | 947,550 | 4-Oct | 350.00% | 800.00% | ||
Voyager Resources | A$ | 0.088 | 0.002 | 2.33% | 0.087 | 0.091 | 0.086 | 23,573,979 | 4-Oct | 64.10% | 195.39% | ||
Xanadu Mines | A$ | 0.385 | -0.01 | -2.53% | 0.385 | 0.385 | 0.385 | 31,521 | 4-Oct | -31.86% | |||
HKEx | Solartech Int’l | HKD | 0.16 | -0.008 | -4.76% | 0.149 | 0.165 | 0.149 | 832,500 | 4-Oct | -83.33% | -71.43% | |
Winsway | HKD | 1.51 | -0.14 | -8.48% | 1.65 | 1.7 | 1.47 | 11,218,000 | 4-Oct | -66.40% | |||
SouthGobi Resources | HKD | 44.7 | -3.65 | -7.55% | 47.35 | 47.95 | 43 | 64,676 | 4-Oct | -55.08% | -43.42% | ||
China Gold | HKD | 19.98 | -1.17 | -5.53% | 20.4 | 20.5 | 19.6 | 349,200 | 4-Oct | -52.43% | |||
CNNC Int’l | HKD | 1.88 | -0.03 | -1.57% | 1.85 | 1.88 | 1.85 | 29,000 | 4-Oct | -78.39% | -68.30% | ||
Mongolia Energy | HKD | 0.465 | 0.005 | 1.09% | 0.455 | 0.475 | 0.455 | 8,559,000 | 4-Oct | -79.96% | -85.47% | ||
Zijin Mining | HKD | 1.96 | -0.21 | -9.68% | 2.2 | 2.25 | 1.95 | 76,156,299 | 4-Oct | -58.45% | -54.61% | ||
Mongolia Inv Group | HKD | 0.044 | 0.002 | 4.76% | 0.042 | 0.044 | 0.041 | 3,216,000 | 4-Oct | -70.27% | -74.86% | ||
North Asia Resources | HKD | 0.4 | -0.04 | -9.09% | 0.395 | 0.44 | 0.395 | 120,000 | 4-Oct | -56.04% | -71.43% | ||
Bestway Int’l | HKD | 0.046 | 0 | 0.00% | 0.046 | 0.046 | 0.046 | 0 | 4-Oct | -67.38% | -72.62% | ||
Asia Coal | HKD | 0.088 | 0 | 0.00% | 0.088 | 0.088 | 0.088 | 0 | 4-Oct | -64.80% | -56.00% | ||
Mongolian Mining | HKD | 5.25 | -0.52 | -9.01% | 5.64 | 5.69 | 4.94 | 10,873,500 | 4-Oct | -42.12% | |||
SGX | LionGold | SGD | 0.86 | 0 | 0.00% | 0.86 | 0.87 | 0.86 | 10,187,000 | 4-Oct | 17.81% | 112.35% | |
LSE | Central Asia Metals | GBp | 69 | 1 | 1.47% | 67 | 69 | 66 | 28,753 | 4-Oct | -23.55% | -28.13% | |
Petro Matad | GBp | 30.5 | -2.75 | -8.27% | 33.25 | 33.25 | 28 | 704,367 | 4-Oct | -75.00% | -83.51% | ||
Metal-Tech | GBp | 6 | -3.75 | -38.46% | 9.75 | 9.75 | 5.75 | 146,561 | 4-Oct | -61.29% | -57.14% | ||
Origo Partners | GBp | 26.625 | -2.625 | -8.97% | 29.25 | 29.625 | 26 | 347,174 | 4-Oct | -35.06% | -8.97% | ||
North America | Aberdeen Int’l | CAD | 0.59 | -0.04 | -6.35% | 0.61 | 0.62 | 0.57 | 244,683 | 4-Oct | -27.04% | 28.85% | |
Blue Zen Mem. Parks | CAD | 0.16 | 0 | 0.00% | 0.16 | 0.16 | 0.16 | 0 | 3-Oct | ||||
Centerra Gold | CAD | 18.361 | -0.549 | -2.90% | 18.3 | 19.17 | 17.51 | 592,768 | 4-Oct | -5.47% | 13.94% | ||
China Gold | CAD | 2.75 | 0.12 | 4.56% | 2.64 | 2.97 | 2.55 | 611,835 | 4-Oct | -49.36% | -39.56% | ||
Denison Mines | CAD | 0.9361 | -0.0339 | -3.49% | 0.95 | 0.99 | 0.86 | 3,681,138 | 4-Oct | -72.55% | -45.58% | ||
Denison Mines | $ | 0.94 | 0 | 0.00% | 0.9 | 0.94 | 0.81 | 2,611,062 | 4-Oct | -72.51% | -44.71% | ||
East Asia Minerals | CAD | 0.49 | -0.07 | -12.50% | 0.54 | 0.54 | 0.49 | 29,300 | 4-Oct | -93.96% | -91.58% | ||
Entree Gold | $ | 1.32 | -0.03 | -2.22% | 1.25 | 1.32 | 1.15 | 341,161 | 4-Oct | -61.85% | -51.65% | ||
Erdene Resource | CAD | 0.37 | 0.055 | 17.46% | 0.35 | 0.37 | 0.32 | 128,175 | 4-Oct | -70.16% | -26.00% | ||
Entree Gold | CAD | 1.34 | -0.03 | -2.19% | 1.42 | 1.42 | 1.23 | 136,000 | 4-Oct | -61.38% | -51.62% | ||
Fortress Minerals | CAD | 5.21 | 0 | 0.00% | 0 | 8-Jun | |||||||
Garrison Int’l | CAD | 0.025 | 0 | 0.00% | 0.025 | 0.025 | 0.025 | 0 | 3-Oct | -68.75% | |||
Gulfside Minerals | CAD | 0.07 | 0 | 0.00% | 0.07 | 0.07 | 0.07 | 4,000 | 4-Oct | ||||
Green Tech Solutions | $ | 0.118 | -0.01 | -7.81% | 0.1078 | 0.13 | 0.102 | 32,912 | 4-Oct | -97.05% | |||
Ivanhoe Energy | CAD | 0.97 | -0.02 | -2.02% | 0.95 | 0.99 | 0.9 | 1,084,582 | 4-Oct | -64.34% | -54.88% | ||
Ivanhoe Energy | $ | 0.95 | -0.0099 | -1.03% | 0.93 | 0.95 | 0.8427 | 1,494,976 | 4-Oct | -65.07% | -54.98% | ||
Ivanhoe Mines | CAD | 14.6 | 1.11 | 8.23% | 13 | 14.67 | 12.85 | 1,978,110 | 4-Oct | -36.52% | -35.06% | ||
Ivanhoe Mines | $ | 13.86 | 0.98 | 7.61% | 12.48 | 13.9 | 12.11 | 5,668,812 | 4-Oct | -39.53% | -37.01% | ||
Kincora Copper | CAD | 0.31 | -0.005 | -1.59% | 0.31 | 0.31 | 0.31 | 388 | 4-Oct | ||||
Khan Resources | CAD | 0.24 | 0 | 0.00% | 0.25 | 0.25 | 0.24 | 10,025 | 4-Oct | -50.00% | -36.00% | ||
Long Harbour | CAD | 0.35 | 0 | 0.00% | 0 | 10-Mar | |||||||
Lucky Strike | CAD | 0.7 | 0 | 0.00% | 0.7 | 0.7 | 0.7 | 0 | 3-Oct | ||||
Meritus Minerals | CAD | 0.03 | 0 | 0.00% | 0.035 | 0.035 | 0.03 | 0 | 30-Sep | -90.00% | |||
Manas Petroleum | $ | 0.18 | -0.03 | -14.29% | 0.19 | 0.209 | 0.18 | 70,175 | 4-Oct | -70.00% | -67.27% | ||
Blue Wolf Mongolia | $ | 9.58 | 0 | 0.00% | 9.65 | 9.65 | 9.58 | 0 | 13-Sep | ||||
Blue Wolf Mongolia | $ | 10.2 | 0 | 0.00% | 10.2 | 10.2 | 10.2 | 500 | 4-Oct | ||||
Manas Petroleum | CAD | 0.43 | 0 | 0.00% | 0 | 10-May | |||||||
Prophecy Coal | CAD | 0.41 | -0.03 | -6.82% | 0.43 | 0.43 | 0.4 | 130,500 | 4-Oct | -53.05% | -7.02% | ||
Puget Ventures | CAD | 0.36 | 0 | 0.00% | 0 | 6-Aug | |||||||
SouthGobi Resources | CAD | 6.28 | 0.08 | 1.29% | 5.54 | 6.28 | 5.54 | 165,685 | 4-Oct | -48.44% | -40.87% | ||
Solomon Resources | CAD | 0.08 | 0 | 0.00% | 0.08 | 0.08 | 0.08 | 0 | 3-Oct | -77.14% | |||
Wedge Energy | CAD | 0.015 | 0 | 0.00% | 0 | 3-Aug | |||||||
Mongolia Growth Group | CAD | 4.6 | -0.12 | -2.54% | 4.78 | 4.78 | 4.52 | 22,669 | 4-Oct |
---
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
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Central Tower · 12th Floor · Left Wing · 2 Sukhbaatar Square
Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Disclosure/Disclaimer
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.
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